Two years ago the Walmart Foundation partnered with the National Retail Federation and other stakeholders to try and change the perception of retail jobs in America, and the work continues to “accelerate mobility” for workers in the sector.
Kathleen McLaughlin, president of the Walmart Foundation, recently addressed the media on the importance of the ongoing work.
“We think retail can play an exciting role in the jobs market overall as a point of entry for people, but also accelerate mobility for retailer workers. We want to help people move up the career ladder in retail,” McLaughlin said.
The first strategy in the program has been to change the perception of retail jobs to a place of opportunity and try to shift or reframe the way people view jobs in retail, not only those who work in retail but also the way employers, community colleges and others view the sector, she added. Research has been funded into determining the skills that would be needed.
The second strategy is focused on innovations in skill acquisition. The Foundation made grants to the National Immigration Board who worked in the Miami, Florida area around an English language acquisition program in the retail context, she said. The work also included using the New Venture Fund which the Walmart Foundation co-funded with other stakeholders to drive tech learning.
The third strategy has involved engaging other retail employers to change the way they invest in their own people and to bring others to the table in their effort to shift the entire system, McLaughlin said.
“Retail is in undergoing a massive transformation and we are right in the middle of it as it’s becoming a much more digitally enabled sector and to stay relevant for our customers we have to serve them in more unique ways. To do that we have to continue to invest in the skills of our people,” McLaughlin said.
RETAIL JOB STABILITY
A board of workforce professionals was also convened by Wal-Mart for a panel discussion on the topics of stability and mobility in the retail jobs sector. McLaughlin asked the panel to discuss their roles in the overall strategy of changing the way retail jobs are viewed by the world today. Andy Van Kleunen, CEO of the National Skills Coalition, served as the moderator for the panel.
Van Kleunen said the national economy looks good with an unemployment rate of 4.3%, but that metric doesn’t disclose the kinds of jobs people are getting or what they earn or if those jobs hold an opportunity for advancement. He said the skills needed to secure a job and stay there long enough to build opportunity for advancement is much higher than any time in the past. He said that’s why many employers say they can’t find job candidates with the required skills in this so-called full employment state.
He said retail and other hospitality and food service jobs have long been viewed as entry-level positions where people frequently move in and out of the jobs and changing that perception must begin from the inside. Rachel Schneider, senior vice president at Center for Financial Services Innovation, recently co-authored a study and spent time with families for a year to try and understand their financial decision making in terms of saving, borrowing and spending.
“While the unemployment level is really low that is not telling you what is happening with some families over a course of a year. … We gathered cash flows data from families over time so that we didn’t just a have snapshot, but a more fluid looks at their financial picture. One of the big learnings was that while many families earn enough money throughout the course of a year to cover their expenses that earning is uneven and there are times when there are cash shortfalls,” Schneider said.
She explained that families on average had five months out of 12 with major fluctuations in earnings, which were not attributed to tips or commissions, but it was the change in paychecks week-to-week or month-to-month of them doing the same job amid shift fluctuations. She said this creates a challenge for retail workers when they have to think about how to manage their spending.
Schneider said it’s wrong to categorize some jobs as good and some as bad. She said manufacturing jobs were seen as deplorable at the dawn of the 20th Century as workers were underpaid, with terrible working conditions but they eventually became good jobs because for decades employers, government and workers all worked to make them better.
“Today what we have is a lot of retail jobs and we need to figure out how to make those good jobs and drop the assumption that jobs are inherently better or worse than others,” she added.
Retail is a huge force in the labor market, accounting for as many as one in four jobs, according to the National Retail Federation. But in recent months the sector has been losing jobs at an alarming rate amid store closures and retailer bankruptcies. The sector has shed more than 67,000 jobs between February and May, making it more difficult for many retail workers to achieve stability.
To exacerbate the challenge, retail jobs pay about $8 less an hour than the average across the private sector, according to Robert Johnson, director of economic analysis at Morningstar.
David Scott, senior vice president of talent and organization effectiveness at Wal-Mart, was also a panelist who spoke to the retailer’s efforts to play a bigger role helping workers reach job stability.
“We at Wal-Mart do believe we offer a great first job, and then if people choose to stay with us that can become a career down the road. Stability involves financial wherewithal, scheduling and workplace environment,” Scott said.
He adds that Wal-Mart is piloting a program now with its employees called “paycheck smoothing,” that allows employees to set aside money when they have earned extra. The funds can then be pulled out when they have a lower paycheck. Scott said those piloting the program like it.
“Recently the Federal Reserve Board put out a study that said over half the population wouldn’t be able to handle over a $400 emergency such as car accident or medical crisis and we are looking at ways to help our employees do better budgeting and be more financially stable so that they can also be more participatory in serving our customers out in our stores,” Scott said.
Schneider’s research found workers who are stressed about their finances are able to focus less on doing their jobs. Scott said Wal-Mart continues to tweak its scheduling system which is now called Customer’s First. He and his colleague Ellie Bertani, a director in HR strategy, said scheduling is critical to stability in the minds of retail employees. In 2013, Wal-Mart rolled a new scheduling program that allows store employees to pick up extra shifts at will as they became available. Bertani said the retailer is revamping the program but the premise is the same. She said consumers are moving to shop during off hours and they have to be served when they are in the stores. Bertani also said Wal-Mart ensures store employees get their schedules two weeks in advance so they can plan accordingly.
Scott said stability in retail jobs is a bigger concern among consumers than mobility. However, he said Wal-Mart is still a place where someone can taken an entry-level hourly job and work their way to CEO of Wal-Mart Stores like Doug McMillon, or CEO of Sam’s Club like John Furner.
Scott said many store managers began as hourly employees and today earn an average of $170,000 per year and manage 300 to 500 employees.